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Regaining past glory

Muzaffar Rizvi
Filed on October 2, 2012

The stage is set for Cityscape Global, which will open today with record international presence. The property market, which is showing signs of recovery nearly after four years of slump in the wake of the global financial crisis, is on the road to recovery and set for a strong rebound in the coming days.

Cityscape Global has been a catalyst for real estate investment and development growth across the world’s emerging markets for more than a decade. This year’s edition will welcome more than 20,000 participants who will grab the opportunity to build and maintain their presence across the regional markets.

Now in its 11th edition, the show is the annual meeting point for key real estate investors, developers, investment promotion authorities, architects, designers and professionals to drive growth in real estate investment and development across the emerging markets globally. It will showcase some of the most promising investment opportunities available to regional and international investors.

The three-day premier property event is all set to regain its past glory as it has attracted leading international and regional names in the industry. This year international participation will exceed more than 50 per cent of the exhibition space. The pavilions from Turkey, Russia, Qatar, Egypt, the Americas, India and Iraq will be centre of attention at the show, which has become a significant international platform for the real estate industry.

The local and regional developers and other stakeholders in the industry are also gearing up to help energise the property market through 2012 and beyond. The record number of international pavilions and strong presence of UAE developers at the event bodes well for the local and emerging real estate markets.

“With 50 per cent more exhibitors crowding the show floor this year, Cityscape Global 2012 is set to mark a milestone in the changing face of the global real estate market as the sector looks towards a bigger, brighter future,” Wouter Molman, Cityscape Global Exhibition Director, said in a statement to Khaleej Times.

“The exhibition has now firmly entrenched itself as the focal point of the regional and global real estate sector, and we look forward to a highly successful and extremely busy three days ahead.”

A score of local real estate developers is expected to announce their latest projects and providing updates on existing developments. Emaar Properties, Dubai Properties Group and Nakheel, while Abu Dhabi figureheads Aldar and the Tourism Development and Investment Company (TDIC) will be in the limelight during the event.

Financial experts and property analysts said Dubai’s strengthening property market is a reflection of the UAE’s improving economic performance. The emirate’s superior infrastructure investment and robust population growth has established solid foundations for future economic growth.

Dubai is widely viewed as a regional financial, transport and logistics hub, placing it in an excellent position to benefit from regional growth and build up its property sector on solid foundations due to growing interest of investors.

According to Dubai government’s published figures, foreign investors buying real estate were responsible for acquisitions of Dh28.3 billion ($7.7 billion) in the first half of 2012, reflecting a strong growth of 36 per cent over the corresponding period last year. Property transactions in the emirate grew 21 per cent to Dh63 billion ($17.15 billion) in the first half of 2012, compared to the third quarter and fourth quarter of last year.

Confidence on govt policies

“I think investors are showing confidence in the UAE government and its policies. I believe it’s not about investment in the property sector, but it’s about investment in the UAE government and in its Vision 2020,” Jitendra Gianchandani, chairman and managing partner of Jitendra Consulting Group, told Khaleej Times.

He said Dubai’s real estate market has shown signs of reclamation during the first six months of this year as villa and luxury projects showed strong growth. “The UAE market including property and others will flourish and will recover in the coming days. However, the global market might still have zigzag pathway to achieve stability,” he said, adding that the outlook for 2012 and 2013 will remain optimistic as far as property market in the UAE is concerned.

Cluttons, the real estate specialist, also predicts that property prices will remain relatively stable over the next 12 months, as the 24,000 residential units scheduled to be delivered in the second half of 2012 will bring a large stock of supply onto the market making huge price uplifts or a ‘boom’ scenario unlikely.

“The overall trend in the marketplace is positive with general price stability across the emirate and some price rises noted in specific areas,” Cluttons said in its third-quarter 2012 report for Dubai’s residential market.

Damac Properties, the Middle East’s largest private luxury developer, also said that the real estate market’s recovery is on track.

“Confidence is coming back to the Dubai market and investors are looking to capitalise on some great offers. We are set to see an increase in valuations throughout the rest of the year and into 2013,” Niall McLoughlin, senior vice-president, Damac Properties, told Khaleej Times in a recent interview.

Referring to the latest report from Knight Frank, he said that Dubai’s market is continuing to see an upturn in real estate valuations in the luxury sector.

“We are certainly seeing positive signs that Dubai’s property market is recovering. While we retain a cautious optimism, we believe that the improvement in valuations will continue to increase well into 2013,” he said.

Ian Plumley, general manager - property sales at Dubai Festival City, also echoed the same views and said the property sector in Dubai is on its way towards recovery.

“The small spurts of growth that the market has been experiencing since the second half of 2011 is gaining momentum. We have witnessed quality developments during the second quarter of 2012 after a stable first quarter, which is a clear sign that the property sector in Dubai is on its way to recovery.

“We have noticed that both the owner occupier and a number of investors are getting back into the market and the sector is witnessing a rise in transactions. We expect this momentum to build into 2013.”

He said after three years of declining rates and limited sales activity, the real estate market is on its way to recovery, especially in the established communities with completed infrastructure such as Dubai Festival City.

“Looking ahead towards the end of 2012, we expect sales prices in the emirate to continue to rise for quality developments. In line with this positive outlook, Dubai Festival City recently announced the freehold sale of 24 townhouses for the first time and sold 12 within six weeks,” he said.

Plumley said due to a decline in demand for luxury real estate in Dubai during the financial crisis post-2008, many property developers announced mid-income housing projects as the mid-income segment was virtually untapped.

“Whilst the segment is continuing to witness demand due to a growing mid-income population in the UAE, the luxury real estate segment started to regain momentum post-2010 and today we are witnessing growth in the premium real estate sector within a number of areas in Dubai, including Dubai Festival City.”

Gianchandani also said luxury properties are still in demand and plenty of opportunities are available in the market.

McLoughlin said the luxury market in Dubai will always remain a key area for investors. “There are many outstanding investment opportunities at the moment, especially in the luxury sector. The savviest buyers are coming back into the market in a big way,” he said.

Permanent residency

Gianchandani said changes in visa regulations, or permanent residency for property buyers, can boost real estate in the UAE or Dubai. “Yes for sure, but as this is not on the immediate agenda, so nobody is thinking about this.”

Plumley said an entitlement to permanent residency status in Dubai is one of the decisive factors for property investors. He said the initiative would certainly encourage long-term expats and foreign investors to purchase properties in the emirate and could provide a boost to the market as a whole.

“Dubai is one of the preferred destinations for expatriates who often consider purchasing a property in Dubai as their second home,” Plumley concluded.

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